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Hummingbird Resources expects DFS costs to halve thanks to grant

Last updated: 17:36 07 Nov 2013 AEDT, First published: 18:36 07 Nov 2013 AEDT

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The cost of Hummingbird Resources' (LON:HUM) definitive feasibility study (DFS) for its Liberian project is expected to more than halve thanks to a government grant.

MDM Engineering - the lead for the DFS and Front End Engineering and Design (FEED) for the  Dugbe 1 project - has received approval from the South African department of trade and industry for a grant to support its work.

Hummingbird now expects to benefit from a 55% reduction in the cost of this work.

The firm has already arranged US$20mln of funding via a US$5m strategic investment from the IFC and a US$15m royalty agreement with Anglo Pacific Group and previously confirmed it is fully funded through to the end of the DFS.

Chief executive of Hummingbird, Dan Betts said the grant was a  "strong endorsement" for MDM and the Dugbe 1 project.

"It also provides a significant cost saving for Hummingbird as we progress through our DFS and FEED."

A preliminary economic assessment of the project showed a 3.5mln tonnes per annum tank leach operation with a net present value of US$337mln on capital expenditure of US$212mln for an internal rate of return of 43.4%.

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